SpaceX sued for laying off hundreds of workers without proper notice

Employees at SpaceX have filed a lawsuit claiming the Hawthorne rocket company laid off 200 to 400 factory workers last month without proper notice under state law.

According to the Cal WARN Act, employers generally must give a 60-day warning to workers before “mass layoffs” can occur. The California Labor Code defines a mass layoff as one that occurs within a 30-day period and affects 50 or more employees.

“The WARN Act is very clear. You’re entitled to back pay and wages if you are not given notice,” said Leonard Sansanowicz, an attorney with Feldman Browne Olivares, the law firm representing former SpaceX technicians Bobby Lee and Bron Gatling.

“The notice is designed to provide the employees with the opportunity to get training in another field or to look for another job,” Sansanowicz said. “This is more of an issue with smaller communities, but even here the effects of laying off 400 people in one day is not minimal.”

SpaceX did not respond to requests for comment on the lawsuit, which was filed Monday in Los Angeles Superior Court. The terminations occurred “on or about” July 21, according to the lawsuit, although SpaceX has declined to confirm an exact number of positions.

Sansanowicz said SpaceX, also known as Space Exploration Technologies, offered severance packages to Gatling and Lee that represented less than 60 days of back wages and benefits. The class-action lawsuit means that if Gatling and Lee win, any employees terminated in similar fashion would benefit from the ruling.

“I do find this a little surprising,” said Chris Tilly, director of the UCLA Institute for Research on Labor and Employment. “Most manufacturers have the WARN Act in their bloodstream. ... It’s standard operating procedure.”

Advertisement

The layoffs came after an annual review cycle that included “some rebalancing of resources,” SpaceX spokesman John Taylor said in an email before the lawsuit was filed.

“Our resulting head-count reduction was less than 5 percent,” Taylor said. “SpaceX expects to see net positive employee growth in 2014 of approximately 20 percent.”

SpaceX employs more than 3,000 people, according to its website. President Gwynne Shotwell reportedly has said the total number had climbed to 3,800 in October. Several hundred job openings are listed on the company’s website, which a spokesperson confirmed is up to date.

“It wouldn’t surprise me if they were testing a technology that didn’t work out and now they no longer need those employees,” said Marco Caceres, senior space analyst at the Teal Group, a Washington D.C.-based defense and aerospace consulting firm.

“This is still a very young company and it’s involved in so many different markets in terms of civil, commercial, military, university. ... If it were a thousand employees, that would concern me. But a couple hundred? I can’t get too excited yet.”